That CTS Global [CTS 11.00 11.0%] https://www.philstar.com/business/stock-commentary/2022/04/18/2174985/cts-global-shares-11-successful-ipo The IPO was basically the only thing happening in the shortened trading week leading up to the Holy Week holiday, so all eyes were on Edward Lee’s newest public company as it began trading on Wednesday morning.
CTS priced its IPO at 1.00 pesos/share, a meme price for sure but a welcome one for traders as interest in the stock drove the price higher from the start.
CTS started the day up between 5% and 7% and is up about 13% within the first hour of trading.
By the end of the second hour of trading, the stock was up about 17% before edging back a bit and going into the lunch break up about 14%.
Full-bellied traders pumped the price a bit more, taking it to P1.19 (+19%) just after lunch, but there was a lot of selling pressure in the final hour of trading and the stock ended the day up 11% to P1.11/share .
Over P600 million in CTS shares traded that day, making it the most active stock on the exchange.
CTS has around 2.17 billion shares in public trading, so the 0.54 billion shares traded represent only about 25% of the public stock traded on IPO day.
MB bottom line
A thoroughly successful day for everyone involved.
Of course, we’re excluding the thousands of traders who bought the shares (for now) above the closing price.
Who knows what today’s trading has in store for these traders.
Looking back at the past eight IPOs, just one of the last eight, Medilines sales partners [MEDIC 0.85 1.19%]She lost money on her opening day.
CTS won, so avoided joining this shady group.
However, if you look at the current share prices of the last eight IPOs, only half are currently above their IPO offer price (CTS (+11%), Bank of Commerce [BNCOM 12.18 unch] (+2%), Citicore Energy REIT [CREIT 2.57 0.39%] (+1%) and Solar Philippines NEC [SPNEC 1.78 0.56%] (+79%)), and only one, SPNEC, is above its first-day close.
Like SPNEC, CTS was rated P1.00, launched with no stabilization fund and was somewhat difficult to “price” due to the lack of insightful financial statements.
Yes, CTS had three years of data, but performance was very patchy and it wasn’t clear exactly how the infusion of new capital would change the company’s performance.
Unlike SPNEC and more similar house talk [HTI 1.15 2.54%] (no stabilization fund, moderate success on the 1st day, “maybe” oversubscribed) CTS ended the day in the red, well below the daily high.
HTI’s second trading day was very similar to the first, with very similar highs and lows and exactly the same close at about a third the volume.
On the third day, it was already trading below the IPO offer price.
If I were a CTS holder I would definitely be watching the first few days of this week very closely for the last hour of trading.
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